Previous Section Back to Table of Contents Lords Hansard Home Page

Lord Inglewood moved Amendment No. 20:

Page 9, line 15, leave out subsection (3).

On Question, amendment agreed to.

Clause 10 [Power to require two or more multiplex licences to be granted to one person]:

[Amendment No. 21 not moved.]

Clause 11 [Failure to begin providing licensed service and financial penalties on revocation of licence]:

Lord Inglewood moved Amendment No. 22:

Page 10, line 27, after ("of") insert ("whichever is the greater of--
(a) £50,000, or
(b) ").

The noble Lord said: My Lords, Amendment No. 22 is grouped with a large number of other amendments and unless your Lordships wish I shall not read out all the numbers. The numerous amendments relate to one topic: the system of fining licence holders who have failed to comply with their licence conditions.

5 Mar 1996 : Column 217

Current provisions in the Bill hold that the amount of any financial penalty should be calculated according to percentages of the multiplex revenue accountable to a licence holder for his last complete accounting period. This system of fines is used right across the board--for multiplex licence holders, digital programme service licence holders and additional service licence holders for both digital television and digital radio.

However, we are concerned that in the start-up period, multiplex revenue may be modest and the proposed percentages will therefore mean only negligible fines. This would undermine the enforcement regime. The sums involved may provide an inadequate sanction.

Our amendments make provision for the two types of penalties which may be levied: first, the penalty for failure to begin providing the licensed service, which by definition can only fall upon the multiplex provider. Our amendments provide that a penalty levied for this reason should be whichever is the greater of £50,000 or 7 per cent. of the multiplex revenue attributable to him. The other type of penalty is against failure to comply with conditions of licence; this may be levied against multiplex providers, programme service providers and additional services providers. We need to be more flexible here in recognition that there will be companies of hugely differing sizes within this group. Our amendments provide that the penalty for breach of licence conditions should not exceed whichever is the greater of £50,000 or the appropriate percentage of multiplex revenue attributable to the licence holder. The important difference is that the regulators are granted discretion to set the penalty at a figure which is less than £50,000 or calculate the appropriate percentage of multiplex revenue. This gives the regulators some discretion as to which base it is appropriate to invoke and to decide whether a £50,000 fine or a fine based on a percentage of multiplex revenue would provide the most appropriate penalty. I believe that this will allow more realistic and more effective sanctions.

The purpose of these amendments is therefore to bring the Bill into line in the various sections.

There is also another provision to which I would draw your Lordships' attention. The new clauses to be inserted after Clause 30 and Clause 61 allow the Secretary of State to vary by negative resolution the £50,000 figure set out in the clauses on financial penalties. This recognises the fact that such a figure may need to be varied at some point in the future in order to take account of inflation.

In addition, Amendments Nos. 168, 169 and 223 have been brought forward following representations we have received from the Independent Television Commission to regularise the position of all their licensees. I should stress that these amendments deal solely with the maximum levels of fines for breaches of ITC licences. The level of actual fine imposed and in what circumstances remains a matter for the ITC. The amendments bring the holders of non-domestic satellite service licences and the holders of licensable programme service licences into line with Channels 3, 4 and 5.

5 Mar 1996 : Column 218

Under the current provisions of the Broadcasting Act 1990, the maximum financial penalty the ITC can impose on these two categories is £50,000. That limit can be altered by the Secretary of State by order. With the growth of the broadcasting industry and particularly rapid growth in some sectors we accepted the ITC's point that such fine limits could quickly become out of date. Rather than the Secretary of State having to amend limits by order, we agreed with the ITC that it was more sensible to base maximum fines on the same basis that applies to Channels 3, 4 and 5; namely, a financial penalty up to 3 per cent. of the qualifying revenue for the licensee's last complete accounting period for the first offence and a fine not exceeding 5 per cent. for subsequent offences.

While the new limits bring the non-domestic satellite service licensees and licensable programme service licensees into line with other broadcasters, we have retained the £50,000 provision as well, since for some licensees such as small community cable channels, it is more sensible to keep the cash limit as qualifying revenue can be negligible.

The differing arrangements were made at a time when many satellite and cable services were newly established and needed significant help to get off the ground, but there is no reason now why they should not face the same level of fines. I beg to move.

On Question, amendment agreed to.

Clause 12 [Conditions attached to multiplex licence]:

[Amendment No. 23 not moved.]

Lord Inglewood moved Amendment No. 24:

Page 11, line 43, leave out subsection (6) and insert--
("(6) No order under subsection (5) shall be made unless a draft of the order has been laid before and approved by a resolution of each House of Parliament.").

The noble Lord said: My Lords, with this amendment I wish to speak to Amendment No. 62. The first of the amendments relates to television, the second to radio and they mirror one tabled by the noble Lord, Lord Donoughue, at Committee stage and on which I undertook to think further. They provide that the Secretary of State's power to alter the percentage of the broadcasting spectrum which may be used for additional services should be subject to affirmative rather than negative resolution. We accept the noble Lord's argument that an order which alters the extent to which the broadcasting spectrum is actually available for programme services might well raise substantial issues for which the affirmative resolution procedure would be justified. I beg to move.

Lord Donoughue: My Lords, I thank the Minister for being so constructive and helpful on the matter.

On Question, amendment agreed to.

Clause 15 [Attribution of multiplex revenue to licence holder and others]:

Lord Inglewood moved Amendments Nos. 25 and 26:

Page 15, line 9, leave out (" 17(2)") and insert (" 17(2A)").

5 Mar 1996 : Column 219

Page 15, line 23, leave out (" 21(2) or section 25(2)") and insert (" 21(2A) or section 25(2A)").

On Question, amendments agreed to.

Clause 16 [Duration and renewal of multiplex licences]:

Lord Inglewood moved Amendments Nos. 27 to 30:

Page 16, line 12, leave out subsection (4) and insert--
("(4) At any time before determining the application, the Commission may--
(a) require the applicant to furnish--
(i) a technical plan which supplements that submitted by the licence holder under section 8(4)(b), and
(ii) proposals which supplement any proposals submitted by the licence holder under section 8(4)(f), and
(b) notify the applicant of requirements which must be met by that supplementary technical plan or those supplementary proposals and relate to the matters referred to in section 8(4)(b)(i) and (ii) and (f).
(4A) The consent of the Secretary of State shall be required for any exercise by the Commission of their powers under subsection (4) and for any decision by the Commission not to exercise those powers.").
Page 16, line 25, leave out from beginning to ("or") in line 28 and insert--
("(b) any supplementary technical plan or supplementary proposals submitted under subsection (4)(a) fail to meet requirements notified to the applicant under subsection (4)(b),").
Page 16, leave out lines 32 and 33 and insert--
("(7) Subject to subsection (7A), on the grant of any such application the Commission may with the consent of the Secretary of State, and shall if so required by him--").
Page 16, line 42, at end insert--
("(7A) Where an order under section 13(2) is in force on the relevant date, no percentage of multiplex revenue shall be payable as mentioned in subsection (7)(a) during the period for which the licence is to be renewed.").

The noble Lord said: My Lords, I beg to move Amendments Nos. 27 to 30 and speak to Amendments Nos. 65 to 68. We have provided in the Bill as it stands for multiplex licences to be awarded for 12 years and to allow licence holders to renew their licences at the end of the first licence period for a further 12 years. These arrangements recognise the investment needed and the likelihood that the return on that investment will begin to be realised towards the end of the first licence period.

As I have so often emphasised, we cannot be certain how far and how fast the digital terrestrial market will develop. But we certainly hope that it will develop in such a way that will allow us to set a timescale for the withdrawal of analogue frequencies and to switch to an all-digital regime. It could well be that, as we approach the end of the first multiplex licence period, we are in a position to prepare the ground for the end game in our analogue switch off strategy.

The Bill already provides for the ITC and the Radio Authority to set new minimum requirements for the roll-out of transmission and the promotion of receiver take-up which licence holders would have to be prepared to meet if they wanted to renew. My amendments require the regulators to obtain the Secretary of State's approval of those minimum requirements. This does not undermine the proper role

5 Mar 1996 : Column 220

of the regulators, but rather underlines the Secretary of State's role in determining the timescale for analogue switch off--a policy issue which is clearly for Government rather than the regulator.

My amendments also require the regulators to obtain the Secretary of State's approval to the percentage of multiplex revenue to be paid on renewal, again reflecting the importance of creating the right conditions for the future of digital broadcasting and for analogue switch off. I would remind your Lordships that we have already stated clearly our intention that no payments to the Exchequer should be made during the first licence period. We will need to reassess the position as licences fall due to be renewed, and will take into account then the state of development of the market and the need for licence holders to provide the taxpayer with a reasonable return in exchange for the use of spectrum, which is of course such a valuable commodity. I beg to move.

On Question, amendments agreed to.

Clause 17 [Enforcement of multiplex licences]:

Next Section Back to Table of Contents Lords Hansard Home Page